Organogenesis, Shire deal

Organogenesis purchased wound healing product Dermagraft human fibroblast-derived dermal substitute ( ABH001) from Shire. Shire will not receive an upfront payment but is eligible for up to $300 million in milestones based on annual net sales targets through 2018. The company will record a $650 million charge in 4Q13. Dermagraft was the sole product in Shire's regenerative medicine unit, which will now cease to exist.

Shire said it made the decision to divest Dermagraft as part of a portfolio prioritization and focus on "operational discipline." The company reported $64.7 million in Dermagraft sales for the nine months ended Sept. 30, 2013, but also had a non-GAAP operating loss of $81 million for Dermagraft operations for the same period. The engineered skin substitute containing live human fibroblasts grown on an absorbable Vicryl mesh is approved in the U.S. and Canada to treat diabetic foot ulcers. Shire gained Dermagraft through its 2011 acquisition of Advanced BioHealing Inc. for $750 million (see BioCentury, July 4, 2011). ...